LABOR - It is the exertion by human beings of physical or mental efforts, or both, towards the production of goods and

services. It shall protect the rights of workers and promote their welfare.

LABOR LAW - The law that governs the rights and duties of the employer (Er) and employees (Ee) with respect to: 
1.The terms and conditions of employment, and 
2. Labor disputes arising from collective bargaining or other concerted activity respecting such terms and
conditions.
CLASSIFICATION OF LABOR LAWS 
1. Labor Standards –The minimum requirements prescribed by existing laws, rules, and regulations as to the
terms and conditions of employment relating to wages, hours of work, cost-of-living allowance, and other
monetary and welfare benefits, including occupational, safety, and health standards.  
e.g. wages, hours of work, 13th month pay
2. Labor Relations – Defines and regulates the status, rights, and duties, and the institutional mechanisms that
govern the individual and collective interactions of Ers, Ees or their representatives. 
e.g. Collective bargaining negotiations
3. Social Legislation - All laws passed by the State to promote public welfare. Laws that provide particular kinds
of protection or benefits to society or segments thereof in furtherance of social justice. It includes statutes
intended to enhance the welfare of the people even where there is no Er-Ee relationship. 
e.g. GSIS Law, SSS Law, Philhealth benefits, 
4. Agrarian Laws
Protection to labor - In affording full protection to labor, this Court must ensure equal work
opportunities regardless of sex, race or creed giving maximum aid and protection to labor, promoting their
welfare and reaffirming it as a primary social economic force in furtherance of social justice and national
development. 

DECLARATION OF BASIC POLICY 

The State shall:  
1. Afford full protection to labor;  
2. Promote full employment;  
3. Ensure equal work opportunities regardless of sex, race, or creed;  
4. Regulate the relations between workers and Er; and,  
5. Assure the rights of workers to self-organization, collective bargaining, security of tenure, and just and
humane conditions of work. (LC, Art. 3) 

SOURCES OF LABOR LAWS 

1. Constitution; 
2. Labor Code and other related special legislation (including their respective IRR);
3. Contracts; 
4. CBA; collective bargaining agreement
5. Company practices; and, 
6. Company policies;

CONSTRUCTION IN FAVOR OF LABOR 

All doubts in the implementation and interpretation of the provisions of this Code including its implementing
rules and regulations, shall be resolved in favor of labor. (LC, Art. 4) In case of doubt, all labor legislation and all
labor contracts shall be construed in favor of the safety and decent living for the laborer. (NCC, Art. 1702) But
protection to labor does not mean oppression or destruction of capital. The Er’s act will be sustained when it is
in the right.

COMPASSIONATE JUSTICE 
In calling for protection to labor, the Constitution does not condone wrongdoing by the employee. However, it
urges a moderation of the sanctions that maybe applied to him in the light of the many disadvantages that
weigh heavily on him like an albatross on his neck. It is disregarding rigid rules and giving due weight to all
equities of the case.

FUNDAMENTAL PRINCIPLES AND CONCEPTS 

1. International Instruments 
3. Labor Code 
4. New Civil Code

C. CIVIL CODE 
Article 1700. The relations between capital and labor are not merely contractual. They are so impressed with
public interest that labor contracts must yield to the common good. Therefore, such contracts are subject to
special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions,
hours of labor, and similar subjects. 
Article 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety
and decent living for the laborer. 
Article 4, Labor Code. Construction in favor of labor. All doubts in the implementation and interpretation of the
provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor.
 Article 1703. No contract which practically amounts to involuntary servitude under any guise whatsoever shall
be valid.
Labor Code
The State shall: 
a. Afford protection to labor, 
b. Promote full employment, 
c. Ensure equal work opportunities regardless of sex, race, or creed, and d.  Regulate the relations
between workers and employers. 
The State shall assure the rights of workers to a. Self-organization,
a. Collective bargaining, 
b. Security of tenure, and 
c. Just and humane conditions of work. [Art. 3]

Security of Tenure 
All workers shall be entitled to security of tenure. a right of an employee and mandated by law that protects
them from being unjustly terminated from employment by their employers.
Police power allows the State to regulate the grant of the right to security of tenure.
Purpose: to safeguard the general welfare of the public. 
Example: Persons who desire to engage in the learned professions may be required to take an examination as a
prerequisite to engaging in the same.

Social Justice
Sec. 9, Art. II, 1987 Constitution: The State shall promote a just and dynamic social order that will: 
a. Ensure the prosperity and independence of the nation; 
b. Free the people from poverty through policies that provide adequate social services; and 
c. Promote:  1. Full employment, 
2. A rising standard of living 
3. Improved quality of life for all
Social justice means: 
a. The promotion of the welfare of all the people, 
b. The adoption by the Government of measures calculated to insure economic stability of all the competent
elements of society –  1. through the maintenance of a proper economic and social equilibrium in the
interrelations of the members of the community, constitutionally; 
2. through the adoption of measures legally justifiable, or extra constitutionally; and 
3. through the exercise of powers underlying the existence of all governments on the
time-honored principle of salus populi est suprema lex. 
Note: The welfare of the people should be the supreme law.

 Limits of Social Justice 

Social justice should be used only to correct an injustice. It is not intended to countenance wrongdoing simply
because it is committed by the underprivileged. It cannot be permitted to be a refuge of scoundrels any more
than can equity be an impediment to the punishment of the guilty. Those who invoke social justice may do so
only if their hands are clean and their motives blameless and not simply because they happen to be poor

Welfare State
The welfare state concept is found in the constitutional clause on the promotion of social justice. 
Purpose:  a. To ensure the well-being and economic security of all the people, and 
b. In the pledge of protection to labor with specific authority to regulate the relations between
landowners and tenants and between labor and capital.
Separation pay as measure of social justice The rule embodied in the Labor Code is that a person dismissed for
lawful cause is not entitled to separation pay. 
Exception: Considerations of equity. Equity has been defined as justice outside law, being ethical rather than
jural and belonging to the sphere of morals than of law. 
Strictly speaking, however, it is not correct to say that there is no express justification for the grant of separation
pay to lawfully dismissed employees other than the abstract consideration of equity. 
Reason: Our Constitution is replete with positive commands for the promotion of social justice, and particularly
the protection of the rights of the workers.

Equal work opportunities 

Declaration of Basic Policy [Art. 4, LC]
The State shall: a. Afford protection to labor, 
b. Promote full employment, 
c. Ensure equal work opportunities regardless of: 1. Sex, 2. Race, or 3. Creed, 
d. Regulate the relations between workers and employers. The State shall assure the
rights of workers to: a. Self-organization, b. Collective bargaining, c. Security of tenure,
and d. Just and humane conditions of work. 
Note: Art. 4 of the Labor Code must be read in relation to the 1987  Constitution since this is still based on the
1973 Constitution. 
 Sec. 3, par. 1, Art. XIII, 1987
Constitution. The State shall:  
a. Afford full protection to labor - 
1. Local and overseas,  
2. Organized and unorganized, and b. Promote full employment and equality of employment
opportunities for all.

Sec. 2, R.A. No. 10911. Declaration of Policies  

The State shall promote equal opportunities in employment for everyone.  To this end, it shall be the policy of
the State to:  
a. Promote employment of individuals on the basis of their –
1. Abilities,  
2. Knowledge,  
3. Skills, and  
4. Qualifications, rather than their age  
b. Prohibit arbitrary age limitations in employment. 
c. Promote the right of all employees and workers, regardless of age, to  be treated equally in
terms of –  1. Compensation, 
2. Benefits, 
3. Promotion, 
4. Training, and 
5. Other employment opportunities. 

Right to self-organization and collective bargaining  

1987 Constitution  
The State shall guarantee:  
a. The right of the people, including those employed in the public and private sectors, to form unions,
associations, or societies for purposes not contrary to law. [Sec. 8, Art. III.]  
b. The rights of all workers to – 
1. Self-organization [Sec. 3, Art. XIII]
2. Collective bargaining and negotiations [Sec. 3, Art. XIII]  
3. Peaceful concerted activities [Sec. 3, Art. XIII] 
4. Strike in accordance with the law. [Sec. 3, Art. XIII] 
Art. 253, Labor Code 
All persons employed: 
a. In commercial, industrial and agricultural enterprises, and 
b. In religious, charitable, medical or educational institutions, whether operating for profit or not, shall
have the right to –  a. Self-organization, 
b. Form, join, or assist labor organizations of their own choosing for purposes of
collective bargaining.
Art. 254, Labor Code  
Employees of government corporations established under the corporation code shall have the right to:  
a. Organize, and  
b. Bargain collectively with their respective employers.  
All other employees in the civil service shall have the right to form associations for purposes not contrary to
law.  
Infringement of the right to self-organization  
It shall be unlawful for any person to restrain, coerce, discriminate against or unduly interfere with employees
and workers in their exercise of the right to self-organization [Art. 257, LC]

Scope of right to self-organization

1. Right to form, join or assist labor organizations of their own choosing for the purpose of collective bargaining
through representatives of their own choosing [Art. 257]; 
2. Right to engage in lawful concerted activities for the same purpose (collective bargaining) or for their mutual
aid and protection [Art. 257] 
3. The right of any person to join an organization also includes the right to leave that organization and join
another one. [Heritage Hotel Manila v. PIGLAS Heritage, G.R. No. 177024 (2009)] 
4. The right to form or join a labor organization necessarily includes the right to refuse or refrain from
exercising said right. It is self-evident that just as no one should be denied the exercise of a right granted by law
so also no one should be compelled to exercise such a conferred right. [Reyes v. Trajano, G.R. No. 84433 (1992)]
5. The right of the employees to self-organization is a compelling reason why their withdrawal from the
cooperative must be allowed. As pointed out by the union, the resignation of the member employees is an
expression of their preference for union membership over that of membership in the cooperative. [ Central
Negros Electric Cooperative v. SOLE, G.R. No. 94045 (1991)] 
6. Their freedom to form organizations would be rendered nugatory if they could not choose their own leaders
to speak on their behalf and to bargain for them. [Pan American World Airways, Inc v. Pan American Employees
Association, G.R. No. L-25094 (1969)]

Construction in favor of labor 

 All doubts in the implementation and interpretation of the provisions of this Code, including its implementing
rules and regulations, shall be resolved in favor of labor. [Art. 4, Labor Code]

LABOR LAW:  RECRUITMENT
MAKING POWER GRANTED BY THE LABOR CODE  
The DOLE through the SOLE and other Government agencies charged with the administration and enforcement of
the LC or any of its parts shall promulgate the necessary IRRs. (LC,Art. 5)

LIMITATIONS TO THE RULE-MAKING POWER GRANTED BY THE LABOR CODE  

1. It must be issued under the authority of law;  
2. It must not be contrary to law and the Constitution; 
3. Must not go beyond the law itself. 

LABOR DISPUTE BETWEEN GOVERNMENT EMPLOYEES  

• The Public Sector Labor-Management Council, not the DOLE shall hear the dispute
• The Labor Code may apply even if the parties are not employers and employees of each other. It is not
correct to say that an employment relationship is a pre-condition to the applicability of the Code. e.g. illegal
recruitment, misuse of POEA license. (1 Azucena, 2016, p. 33)

GOVERNING LAW  
1. Labor Code  
2. Migrant Workers and Overseas Filipinos Act of  
• 1995 (RA 8042, as amended by RA 10022)  
• Worker is any member of the labor force, whether employed or unemployed. [LC, Art.  13(a)] 

RECRUITMENT AND PLACEMENT  

• Any act of canvassing, enlisting, transporting, contracting, hiring, utilizing, or procuring workers; (CETCHUP) and, 
• Includes contact services, referrals, advertising or promising for employment, locally or abroad, whether for
profit or not. [LC, Art. 13(b)]. (CRAP)

PERSONS DEEMED ENGAGED IN RECRUITMENT AND PLACEMENT  

Any person or entity which, in any manner, offers or promises for a fee employment to two (2) or more persons
shall be deemed engaged in recruitment and placement. (LC, Art. 13[b])

PRIVATE RECRUITMENT  
GR: No person or entity other than public employment offices, shall engage in the recruitment and placement of
workers.
XPNs:  
1. Public employment offices  
2. Private employment offices  
3. Private recruitment entities  
4. Shipping or manning agents or representatives 5. The POEA  
6. Construction contractors if authorized by the DOLE and Construction Industry Authority 
7. Members of the diplomatic corps (but hiring must be processed through POEA) 
8. Other persons or entities as may be authorized by the SOLE  
9. Name hires. (Sec. 1[i], Rule II, Omnibus Rules and Regulations implementing the Migrant Workers and
Overseas Filipinos Act of 1995 as amended by R.A. 10022)
NAME HIRES  
Individual workers who are able to secure contracts for overseas employment opportunities with employers
without the assistance or participation of any agency (Omnibus Rules and Regulations implementing the Migrant
Workers and Overseas Filipinos Act of 1995 as amended by R.A. 10022, Rule II).

PRIVATE SECTOR PARTICIPATION IN THE RECRUITMENT AND PLACEMENT OF WORKERS 

Private employment sector shall participate in the recruitment and placement of workers, locally and overseas,
under such guidelines, rules and regulations as may be issued by the SOLE. (LC, Art. 25)

VALIDITY OF LICENSE TO RECRUIT 

1. Local Employment – license shall be valid for a period of three (3) years from the date of issuance unless
sooner revoked or cancelled. (DO 141-4, Sec. 12) 
2. Overseas Employment – regular license is valid up to the full term of four (4) years from the date of issuance
of the provisional license.

PROHIBITED ACTIVITIES IN RECRUITMENT/PLACEMENT 

1. Overcharging;  
2. False Notice;  
3. Misrepresentation to Secure License;  
4. Inducing Worker to Quit;  
5. Inducement not to Employ;  
6. Recruitment for Harmful Jobs;  
 7. Obstructing Inspection; 
8. Non-submission of Reports;  
9. Contract Substitution;  
10. Involvement in Travel Agency; and 
11. Withholding of Documents. (LC, Art. 34) 
12. Failure to Deploy;  
13. Failure to Reimburse; and  
14. Non-Filipino Manager. (as amended by RA 10022) 

CHARACTERISTICS OF A LICENSE  
1. License or authority are non-transferable(Art. 29, LC). License or authority is granted on the basis of personal
qualifications of the grantee. Thus, it is beyond the commerce of man.  
2. Prospective in application (People v. Chua, G.R. No. 128280, 4 April 2001)  
3. It is place-specific. Engaging in recruitment activities in places other than that specified in the license is
prohibited XPN:  Provincial recruitment pursuant to a special recruitment authority

SUSPENSION AND/OR CANCELLATION OF LICENSE OR AUTHORITY  

Non-Licensee or Non-Holder of Authority  
Any person, corporation, or entity:  
1. Which has not been issued a valid license or authority to engage in recruitment and placement by the
SOLE; or  
2. Whose license or authority has been suspended, revoked or cancelled by the POEA or the SOLE.
JURISDICTION  
The SOLE and the POEA Administrator are vested with power to suspend or cancel any license or authority to
recruit employees for overseas employment. (Azucena, Vol. 1, 2016, p. 100; LC,Art. 35)

GROUNDS FOR SUSPENSION OR CANCELLATION OF LICENSE  

1. Commission of prohibited acts under Art. 34 of LC  
2. Publishing job announcements w/o POEA’s approval  
3. Charging a fee which may be in excess of the authorized amount before a worker is employed  
4. Deploying workers w/o processing through POEA  
5. Recruitment in places outside its authorized area (Sec. 4, Rule II, Book IV, POEA Rules).

REGULATORY AND VISITORIAL POWERS OF THE DOLE SECRETARY  

Regulatory Powers 
The Secretary of Labor shall have the power to: 
1. Restrict and regulate the recruitment and placement activities of all agencies; and, 
2. Issue orders and promulgate rules and regulations. (LC,Art. 36)
VISITORIAL POWERS  
The Secretary of Labor or his duly authorized representatives may, at any time: 
1. Inspect the premises, books of accounts and records of any person or entity covered by this Title; 
2. Require it to submit reports regularly on a prescribed form; and, 3.Act on violations of any provisions
of this title. (LC,Art. 37)
 SOLE cannot Issue Search Warrants or Warrants of Arrest  
 Under the 1987 Constitution, only a judge may issue search warrants or warrants of arrest.
Hence, Art. 38(c) of the LC is unconstitutional inasmuch as it gives the SLE the power to issue
search warrants and warrants of arrest. The labor authorities must go through the judicial
process. (Salazar v. Achacoso, G.R. No. 81510, March 14, 1990). 
ILLEGAL RECRUITMENT
• Under Article 38(a) of the LC, illegal recruitment means any recruitment activities, including the prohibited
practices enumerated under Article 34 of this Code, to be undertaken by non-licensees or non-holders of
authority.
• Illegal recruitment shall mean any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or
procuring workers and includes referring, contract services, promising or advertising for employment abroad,
whether for profit or not, when undertaken by non-licensee or non-holder of authority: Provided, That any such
non-licensee or non holder who, in any manner, offers or promises for a fee employment abroad to two or more
persons shall be deemed so engaged. (RA 10022, Sec. 5)

ELEMENTS OF ILLEGAL RECRUITMENT

1. The offender is a licensee/non-licensee or holder/non-holder of authority engaged in the recruitment and
placement of workers; and,
2. The offender undertakes:
a. Any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers and
includes referring, contract services, promising or advertising for employment abroad, whether for
profit or not R.A. 8042 as amended by R.A. 10022]; or,
b. any prohibited practices enumerated (People vs. Sadiosa, GR 107084, May 15, 1998; RA 8042, Sec.
10) under Section 5 of RA 10022. (LC, Art. 34; RA 8042, Sec. 5, as amended by RA 10022)

TYPES OF ILLEGAL RECRUITMENT

 1. Simple – is committed where a licensee/nonlicensee or holder/non-holder of authority undertakes either any
recruitment activities defined under Article 13(b), or any prohibited practices enumerated under Section 5 of RA
10022.
Prescription of action: Five (5) years. (Sec. 12, R.A. 8042)
Where the illegal recruitment is proved, but the elements of large scale and syndicate are absent, the accused
can be only convicted of simple illegal recruitment. (People vs. Sagun, GR 119076, March 25, 2002)
Illegal Recruitment as Economic Sabotage - it is economic sabotage when complex illegal recruitment is
committed.
a. Syndicated – committed by a syndicate if carried out by a group of three (3) or more persons in conspiracy or
confederation with one another;
b. Large Scale or qualified –committed against three (3) or more persons individually or as a group) despite the
lack of necessary license from POEA (People v. Alzona,

EMPLOYMENT PERMIT OF NON-RESIDENT ALIENS

An employment permit may be issued to:
1. a non-resident alien; or,
2. the applicant employer after a determination of the non-availability of a person in the Philippines who is
competent, able and willing at the time of application to perform the services for which the alien is desired.
Article 40 of the LC applies only to “non-resident aliens” not to long-time resident of the country.

PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION (POEA)

While Section 2(c),Republic Act (R.A.) No. 8042 states that the State does not promote overseas employment as
a means to sustain economic growth, the State recognizes the vital role of overseas Filipino workers to the
nation’s economy and development. Aware that overseas workers are vulnerable to exploitation, the State
sought to protect the interests and well-being of these workers with creation of specialized bodies such as the
POEA under the direct supervision of the DOLE Secretary.(Republic of the Philippines v.Humanlink Manpower
Consultants, Inc., G.R. No. 205188,April 22, 2015)

LABOR STANDARDS
GR: Title I, Book III of the Labor Code dealing with hours of work, weekly rest periods, holidays, service incentive
leaves and service charges, covers all employees in all establishments, whether for profit or not.(LC,Art. 82)
XPN: (GF-MOM-WPD)
1. Government employees
2. Field personnel
3. Managerial employees
4. Officers and members of the managerial staff
5. Members of the family of the employer who are dependent on him for
support
6. Workers paid by results (Secs. 1 and 2, Rule I, Book III, Rules Implementing
the Labor Code.)
7. Persons in the personal service of another; and 8. Domestic helpers

Field personnel refers to non-agricultural employees who: 

1. Regularly perform their duties away from the principal place of business or branch office  of the employer;
and  
2. Whose actual hours of work in the field cannot be determined with reasonable certainty.  (Sec. 27, Rule II,
Book III, Rules Implementing the Labor Code.)
They are exempted from the coverage due to the nature of their functions which  requires performance of service away
from the principal place of business. Hence, they are  free from the personal supervision of the employer and the latter
cannot determine with  reasonable certainty the actual number of hours of work expended for the employer's  interest.

PRINCIPLES IN DETERMINING HOURS WORKED 

1. All hours which the Ee is required to give to his Er regardless of whether or not such hours are spent in
productive labor or involve physical or mental exertion. 
2. Rest period is excluded from hours worked, even if Ee does not leave his workplace, it being enough that: a.
He stops working b. May rest completely c. May leave his workplace, to go elsewhere, whether within or outside
the premises of the workplace.
3. All time spent for work is considered hours worked if: a. The work performed was necessary b. If it benefited
the Er c. Or the Ee could not abandon his work at the end of his normal working hours because he had no
replacement d. Provided, the work was with the knowledge of his Er or immediate supervisor.
 4. The time during which an Ee is inactive by reason of interruptions in his work beyond his control shall be
considered working time: a. If the imminence of the resumption of the work requires the Ees presence at the
place of work; or b. If the interval is too brief to be utilized effectively and gainfully in the Ees own interest (IRR,
Book III, Rule I, Sec. 4)
NORMAL HOURS OF WORK 
The normal hours of work of any employee shall not exceed eight (8) hours a day (Art. 83, LC). The eight-hour
work requirement does not, however, preclude the employer in the exercise of its management prerogatives to
reduce the number of working hours, provided that there is no diminution of existing benefits.

XPNS TO 8-HOUR WORK REQUIREMENT:  

Health personnel  
GR: 8 hours for 5 days (40-hour workweek), exclusive of time for meals. 
XPN: Where the exigencies of the service require that such personnel work for 6 days or 48 hours, they
shall be entitled to an additional compensation of at least 30% of their regular wage for work on the 6th
day (LC,Art. 83).
Health personnel covered by the 40-hour workweek: 
a. Those in cities and municipalities with a population of at least 1 million; or   b. Those in hospitals and
clinics with a bed capacity of at least 100.
2. Compressed workweek  
A reduction of the number of regular working days (RWD) is valid where the arrangement is resorted to
by the Er to prevent serious losses due to causes beyond his control, such as when there is a substantial
slump in the demand for his goods or services or when there is a lack of raw materials. There is one
main consideration in determining the validity of reduction of working hours – that the company was
suffering from losses.

CONDITIONS WHERE A "COMPRESSED WORKWEEK" SCHEDULE MAY BE LEGALLY AUTHORIZED AS AN EXCEPTION TO

THE "8-HOUR  A DAY" REQUIREMENT UNDER THE LC 
1. The Ee voluntarily agrees to it 2. There is no diminution in their weekly or monthly take home pay or fringe
benefits 3. The benefits are more than or at least commensurate or equal to what is due to the Ees without
the compressed work week 4. OT pay will be due and demandable when they are required to work on those
days which should have ceased to be working days because of the compressed work week schedule. 5. No
strenuous physical exertion or that they are given adequate rest periods. 6. It must be for a temporary
duration as determined by the DOLE.

MEAL BREAKS 
It shall be the duty of the every employer to give his employees not less than sixty (60) minutes time-off for their
regular meals. (Art. 85, LC) Being time-off, it is not compensable hours worked. The employee is free to do
anything he wants, except to work. If he required to work while eating, he should be compensated thereof.

SHORTENING OF MEAL PERIODS 

A meal period of not less than 20 minutes may be given by the employer providded that such shoter meal period
is credited as compensable hours worked of the employee:
a. Where the work is non-manual in nature or does not involve strenous physical extension;
b.Where the establishment regularly operates for not less than 16 hours a day;
c. In case of actual or impending emergencies or when there is urgent work to be performed on
machinerie, equipments or installations to avoid serious losses which the employer would otherwise
suffer; and
d. Where the work is necessary to prevent serious loss of perishable goods.

NIGHT SHIFT DIFFERENTIAL 

An employee shall be paid night shift differential of no less than ten percent (10%) of his regular wage for each
hour of work performed between 10:00 PM and 6:00 AM (Sec. 2, Rule II, Book III, Rules Implementing the Labor
Code).
G.R.: All employees are entitled to NSD.
XPNS: 1. Those of the government and any of its political subdivisions, including government-owned and/or
controlled corporations;
2. Those of retail and service establishments regularly employing not more than five (5) workers;
3. Domestic helpers and persons in the personal service of another;
4. Managerial employees as defined in Book Three of this Code;
5. Field personnel and other employees whose time and performance is unsupervised by the employer
including those who are engaged on task or contract basis, purely commission basis, or those who are
paid a fixed amount for performing work irrespective of the time consumed in the performance thereof
(Sec 1, Rule II, IRR, Labor Code)
Where the night-time work of an employee overlaps with overtime work, the receipt of overtime pay does not preclude
the receipt of night differential pay. The latter is night pay; the former is payment beyond eight-hour work. (Poquiz, page
185)

NON-WAIVABILITY 
 GR: Waiver of NSD is against public policy (Mercury Drug Co., Inc. v. Dayao, et al., G.R. No.  L-30452, September
30, 1982).  
XPN: Waiver is allowed if this will result to higher or better benefits to Ees.

NIGHT DIFFERENTIAL IN OVERTIME PAY 

If work is done between 10PM and 6AM is overtime work, then the 10% NSD   should be based on the overtime
rate. When the tour of duty of an employee falls at night  time, the receipt of overtime pay will not preclude the
right to night differential pay. The  latter is payment for work done during the night and the other is payment for
the excess of  the regular eighthour work. (NARIC v NARIC Workers Union, 105 Phil. 891)

WAITING TIME 
It shall be considered as working time if:
1. Waiting is an integral part of this work;
2. The employee is required or engaged by the employer to wait; or
3. When employee is required to remain on call in the employer’s premises or so close thereto that he
cannot use the time effectively and gainfully for his own purpose (IRR, Book III, Rule I, Sec. 5).
NOTE: An employee who is not required to leave word at his home or with company officials where he may be
reached is not working while on call (IRR, Book III, Rule I, Sec. 5(b)). The controlling factor is whether waiting
time spent in idleness is so spent predominantly for the employer’s benefit or for the employee’s.

OVERTIME WORK, OVERTIME PAY 

• Overtime work is the service rendered in excess of and in addition to eight hours on ordinary working
days, which are the prescribed daily work period, is overtime work. (Caltex Regular Employees at Mla.
Office v Caltex Phils., Inc., 247 SCRA 398) 
• Overtime pay is the additional compensation of at least 25% on the regular wage for the service or work
rendered or performed in excess of 8 hours a day by employees or labourers in employment covered by
the Eight-hour Labor Law. (LC,Art. 87)
NOTE: Express instruction from the Er to the Ee to render OT work is not required for the Ee to be entitled to OT
pay; it is sufficient that the Ee is permitted or suffered to work. (Azucena, p. 222) However, written authority
after office hours during rest days and holidays are required for entitlement to compensation.